Power price pact (Business Times)

Under the deal, the tariff rates will increase by 1.5 per cent per annum for 30 years.

The power purchase agreement (PPA) was signed yesterday by Sarawak Hidro Sdn Bhd (SHSB) and Syarikat Sesco Bhd, a unit of SEB.

SHSB is a unit of the Finance Minister Inc that manages the Bakun dam, while SEB is the utility arm of the Sarawak state.

“I am happy to disclose that the tariff rate of 6.25 sen per kWh fixed for the sale of electricity generated from Bakun, with an annual increase of 1.5 per cent, is reasonable and competitive to attract investors into Malaysia especially to SCORE,” Najib said at the signing ceremony.

SCORE, or Sarawak Corridor of Renewable Energy, is a major initiative undertaken to develop the central region and transform Sarawak into a developed state by the year 2020.

Najib said electricity generated from the Bakun project will serve as the backbone to SCORE’s success.

He said the federal government was committed to helping Sarawak achieve sustainable economic development.

“I am sure all quarters involved in the successful completion of the Bakun project and SCORE, especially the Sarawak government, will seize the opportunity to not only draw foreign investments into Malaysia but support the objective of the New Economic Model to turn the country into a high-income economy by 2020,” he said.

Bakun dam has eight massive turbines which produce 2,400 megawatts (MW) and is expected to commercially produce its first 300MW of electricity in August.

Meanwhile, SHSB said it expects to earn a minimum revenue of RM36 million this year and RM112 million in 2012.

The company, in a statement, said a water levy of RM7 million and RM21 million will be paid to the state government this year and 2012 respectively.

Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said the state government will impose a one sen per kWh water levy on SHSB a year.

“When the full output of Bakun power station can be accepted by the Sarawak electricity grid from 2016, the full volume of water at the Bakun reservoir will be used to generate 17,500 gigawatt hours of energy per year,” SHSB said.

This represents about 15 per cent of the total electricity generated in Peninsular Malaysia and three times the hydro electricity power generated in the country.

Business Times (2011/06/02)

To most people, 6.25 sen per kWh may just be a number or a figure that may not be relevant to everyday life.

However, to the investors who have been looking at Sarawak for several years now, this number means that that the strategies that they have been planning can take a much more concrete shape.

It gives them the certainty that was not in place before, and thus will help them in the all-important decision-making process regarding their future in the State from now on.

Now the heavy industries will be able to plan for their electricity bill.

What this all means is that SCORE will also now be able to take a much more visible shape, and pretty soon we can expect to see the plants and factories coming up, especially in the “growth node” of Samalaju.